Swiss Re Insurance-Linked Fund Management

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Swiss Re launches cat bond investment adviser, with Guatteri as CEO


Global reinsurance firm Swiss Re has set up a new insurance-linked securities (ILS) venture, launching an SEC registered investment adviser today named Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC), which will have a focus on catastrophe bond investment management.

swiss-re-building-imageThe move comes as the reinsurance giant continues to build-out and formalise its capabilities in managing third-party investor capital, as well as in helping investors to access reinsurance-linked returns from its books of business.

Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC) has been launched today with an investment strategy focused on insurance-linked securities, primarily catastrophe bonds, allowing investors to access Swiss Re’s already existing abilities in catastrophe bond investing, natural catastrophe modelling and underwriting.

Swiss Re has been investing for and managing its own internal catastrophe bond and industry-loss warranty (ILW) portfolio for many years, with that portfolio reaching a size in terms of assets managed of greater than $1 billion in the last year.

As Swiss Re looks to bring third-party investors into its managed, largely cat bond strategy and build that out, the company has named long-standing ILS focused employee MariaGiovanna Guatteri as the CEO of SRILIAC.

MariaGiovanna Guatteri has worked at Swiss Re for almost two decades, having started at the firm in risk modelling, then held roles as a Director of Insurance-Linked Securities trading, the firms Head of ILS Prop Trading and most recently its Head of ILS Portfolio Management.

Guatteri’s long-standing experience in the ILS market and at Swiss Re stands her in good stead to help the company scale this new cat bond investment management opportunity.

SRILIAC has been launched to broaden the scope of Swiss Re’s ILS investment management capabilities, as well as to complement its other ILS strategy focused on natural catastrophe reinsurance contracts, which is managed by Swiss Re Insurance-Linked Investment Management Ltd. (SRILIM).

Swiss Re launched SRILIM and the 1863 ILS Fund platform that it manages in the latter part of 2020.

With now a cat bond focused investment manager and a more collateralised reinsurance focused one, Swiss Re can offer third-party institutional investors a growing range of ways to access insurance and reinsurance linked returns, with its support.

Investors can now access either Swiss Re’s core natural catastrophe book, through SRILIM, or the broader catastrophe bond market alongside Swiss Re through this new investment adviser SRILIAC.

In addition, Swiss Re also has its quota share sidecar structures, including Sector Re, that offer large investors another way to partner with the reinsurance firm and of course remains very active in sponsoring catastrophe bonds of its own.

MariaGiovanna Guatteri, CEO of SRILIAC, commented on the launch of the new cat bond investment manager, “Swiss Re has been trading and investing in ILS for over two decades. Now we are opening our capabilities to institutional investors, allowing them to benefit from our track record and established risk analytics, portfolio management and operational expertise. We believe that our focus on catastrophe bonds will closely align with investors who value liquidity and transparency.”

Philipp Rüede, Head Alternative Capital Partners at Swiss Re, added, “This move comes as the natural next step in the Group’s strategy to have Swiss Re’s Alternative Capital Partners expand the options for attractive investment partnerships with institutional investors. SRILIAC’s investment strategy allows investors to benefit from Swiss Re’s experienced team and a cat bond portfolio constructed through disciplined risk selection.”

As we reported earlier this year, the fee income Swiss Re earns from ILS activities has been growing steadily and that rate of growth will likely increase as the new cat bond and relatively new ILS fund manager units begin to scale.

ILS activities can become a really meaningful source of earnings for Swiss Re, given the reinsurers balance-sheet scale and ability to access attractive underwriting opportunities it can share with third-party investors.

CEO of SRILIAC Guatteri told Artemis, “SRILIAC is committed to helping the growth and institutionalisation of ILS as an asset class through long-lasting partnerships with institutional investors.

“In the short term, we aim to leverage Swiss Re’s franchise and the team’s experience in ILS to place SRILIAC in the top tier of ILS Investment Managers.”

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